Sri Lanka remittances up after tight money kills parallel FX gap, Pakistan down

Sri Lanka’s remittances through official channels picked up to 476 million US dollars in December 2022 up from 353 million dollars a year earlier as parallel market premiums disappeared money printing reduced, while Pakistan is seeing a fall.

Pakistan is seeing an external meltdown as foreign reserves are spent and money is printed to stop interbank rates from going up (sterilized forex sales).

Severe pressure from liquidity injections which fire domestic credit, imports as well as capital flight fro the lost credibility of the exchange rate, then create parallel exchange rates to which remittances are channeled.

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